Recent Bid Protest Decisions: 2010-2011
DATE: October 31, 2011
The following is a compilation of bid protest decisions in cases at the Florida Division of Administrative Hearings during 2010 and 2011. This should be read in conjunction with the article: “ Bid Protests: Know Your Rights - The Clock is Ticking” posted at www.smithlawtlh.com.
These recent cases show a continuing problem with failing to timely raise a challenge to the specifications contained in an Invitation to Bid (ITB), a Request for Proposals (RFP), or an Invitation to Negotiate (“ITN”). Persons submitting bids should be keenly aware that the failure to challenge a specification within 72 hours of when the solicitation is first issued results in the waiver of the right to claims that the specification was biased, anti-competitive, ambiguous, or otherwise deficient.
Recent holdings also affirm the well-established principle that a bid or proposal that does not meet the material requirements of an ITB, RFP or ITN must be rejected as nonresponsive. Judges have rejected arguments that failure to meet mandatory specifications can be cured by post bid submittals, or email clarifications after the bids are opened, or through the negotiation phase prior to award of the contract. In short, if a bid or proposal does not meet material requirements, it should be rejected as nonresponsive.
Some recent decisions uphold the well-established deference that is provided to state Agencies in decisions to award contracts or to reject bids, and that such decisions will be upheld unless clearly erroneous, arbitrary, capricious, or contrary to competition. However, case law continues to hold that such discretion is not unlimited. An agency action will be found “clearly erroneous” if the agency’s interpretation conflicts with the plain and ordinary intent of the law. In such as case, Judicial deference need not be given to the Agency’s interpretation. An Agency action will be found to be clearly erroneous if it is without rational support, and consequently, the trier of fact has a definite and firm conviction that a mistake has been committed.
Actions that are “contrary to competition” include those which:
a) create the appearance of and opportunity for favoritism;
b) erode public confidence that contracts are awarded equitably and economically;
c) cause the procurement process to be genuinely unfair or unreasonably exclusive; or
d) are unethical, dishonest, illegal or fraudulent.
The recent decisions summarized below should be reviewed in the context of the words of the Florida Supreme Court over 80 years ago as to the purpose of competitive procurement laws:
Laws of this kind requiring contracts to be let to the lowest bidder are based upon public economy, are of great importance to the taxpayers, and ought not to be frittered away by exceptions; they serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers’ expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated. Wester v. Belote, 103 Fla. 976, 138 So. 721 (Fla. 1931)
RECENT DECISIONS:
Optimum Technology, Inc. v. Department of Health, DOAH Case No. 11-0275BID; Judge Robert E. Meale.
DOH issued an RFP for a prescription drug monitoring system.
Arguments raised and holdings:
Petitioners argued that the process was flawed because it did not include any meeting to “normalize” the scores of the evaluators to eliminate bias or arbitrary scoring. Held: Such argument could only be raised within 72 hours of issuing RFP, and was therefore waived.
Petitioners argued to disregard scoring of one evaluator as either biased or arbitrary and irrational. Held: The scoring was not shown to be arbitrary, capricious, dishonest, or illegal. However on one item, the ALJ did find the scoring to be
“outside the range of reasonable” and determined by how many points it deviated from a reasonable score. “The ALJ may not revise fraudulent or random scores, but the ALJ may revise scores that are merely outside the range of reasonable, if sufficient evidence exists.”
Petitioners argued that failure to include a detailed and itemized cost proposal rendered the proposal nonresponsive to RFP. Held: Failure to include a detailed written narrative was a minor irregularity that could be waived, because failure to include was not shown to provide any type of competitive advantage.
American Lighting and Signalization v. Florida Department of Transportation, DOAH Case No. 10-7669BID; Judge Suzanne F. Hood.
Case involved a design build RFP for an “intelligent transportation system.” Agency issued intent to award to low bidder and second lowest bidder appealed.
Arguments raised and holdings:
Petitioner argued that low bid was not responsive to mandatory items in the RFP and should have been disqualified, but instead FDOT asked for additional clarifying information from the low bidder after the proposals were opened. Held: It was error to award to low bidder when mandatory items were missing from bid. A clarification process cannot be used to amend a bid and include missing mandatory information.
The Weitz Company, LLC v. Broward County School Board, DOAH Case No. 10-8182BID; Judge Stuart Lerner.
This case involved a “Request for Qualifications” for a construction management at risk at a local high school. The Petitioner was selected as the party for negotiating a contract after a solicitation and evaluation process. After two years of negotiations, the School Board announced its intention to reject all responses and to “hard bid” the project.
Arguments raised and holdings:
The Petitioner argued that it was arbitrary and capricious and contrary to competition to withdraw the RFQ and re-bid after investment of nearly two years in the process. Held: The withdrawal was not shown to be arbitrary or capricious, but was instead a well reasoned decision based on changed economic circumstances, including the opportunity to save substantial taxpayer dollars in a re-bid. Cites long line of decisions as to public interest in saving tax dollars.
Southern Atlantic Company LLC v. Orange County School Board, DOAH Case No. 10-9684BID; Judge Susan B. Harrell.
School Board awarded a contract to a construction contractor, Wharton-Smith, Inc. which required use of competitive procurement of subcontractors. An electrical subcontractor filed a Petition against the School Board when Wharton-Smith selected another vendor for the subcontract work.
Arguments raised and holdings:
Petitioner argued that School Board had elected to retain complete control over the construction work and expenditures by its contractor, and therefore a challenge to the decision of the Contractor to award work to another sub-contractor was proper. Held: The Contractor was not an agent of the School Board, and was a private company that took the action which Petitioner sought to challenge. The fact that School Board retained oversight of the process, and ability to review, did not render it an Agency decision subject to challenge in a 120.57 hearing. Case dismissed.
Humana Dental Insurance Company v. Lee County School Board, DOAH Case No. 10-9846BID; Judge Susan B. Harrell.
Lee County School Board issued an RFP for a dental insurance carrier. After receiving and reviewing proposals, and posting the intent to award to Humana, the School Board decided to reject all proposals. Humana appealed.
Arguments and holdings:
Petitioner argued that the decision to reject all bids was arbitrary. Held:
• Procedural errors in the bid process were fatal including:
a. Allowing the proposers to supply missing information after the proposals were opened;
b. Requesting information from various vendors after the proposals were opened;
c. Allowing the top three proposals to amend their proposals by submitting different type of product not specified in the RFP; and
d. Direct lobbying by representatives of one vendor during the evaluation process.
Keystone Peer Review Organization, Inc. v. AHCA, DOAH Case No. 10-9969BID; Judge John Newton II.
AHCA issued an Invitation to Negotiate (ITN) for Medicaid utilization and peer review services. The incumbent vendor lost in the evaluation process even though it was a lower price proposal by over $12 million.
Arguments raised and holdings:
Petitioners argued that the selection of the higher priced vendor was arbitrary and illogical and that the scoring of the evaluators could not be justified. Held: Selection of the higher priced bidder was justified. AHCA believed that the incumbent was “low balling” its bid, and this finding was not shown to be clearly erroneous, and evidence supported that some the price components did not appear reasonable.
Petitioners argued that the proposed award did not include a specific written finding of why the selected vendor provided the best value to the state. Held: Issue was premature as AHCA had not yet awarded the contract, and ALJ implied finding could be made upon the award, rather than intent to award. Further, ALJ noted that statutory amendments made after the ITN was issued did not apply to the procurement.
To the extent there was any inherent challenge to the ITN suggested, ALJ noted that nobody challenged any terms of conditions of ITN within 72 hours of issuance and therefore any such issue was waived.
Juvenile Services Program, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-6280BID; Judge J.D Parrish.
Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. The RFP sought responses for different geographic areas (Circuits) in the state in one document, rather than issuing separate RFPs for each circuit.
Arguments and holdings:
Petitioner had argued that it was an error to issue the RFP for different circuits with different specific local conditions in one RFP. Held: This argument amounts to a challenge to the RFP specifications which was not made within 72 hours of the RFP being issued and was therefore waived.
Petitioner argued that one evaluator was not qualified because she had no specific experience with the type of service being sought. Held: Although the one evaluator did not have specific experience with Intensive Delinquent Diversion Services, and had never served as an RFP evaluator previously, she was familiar with these services and was properly educated and trained to serve as an evaluator.
Petitioner challenged some scoring of evaluators as arbitrary, and provided evidence of evaluators changing their scores without written explanation as evidence of arbitrary scoring. Held: Scoring was not shown to be arbitrary, and changes showed a thoughtful process even if no written explanation provided.
Psychotherapeutic Services of Florida, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-6279; Judge Elizabeth MacArthur.
Department of Juvenile Justice issued an RFP for a contract to provide Intensive Delinquency Diversion Services. Petitioner brought challenge primarily based upon alleged lack of experience of one evaluator. Held: Even though the evaluator lacked specific direct experience in the program area, she had enough experience and exposure to the program to serve as an evaluator.
Urban Building Systems, Inc. v. Martin County School Board, DOAH Case No. 10-1147BID; Judge Eleanor Hunter.
The School Board issued a Request for Qualifications on a construction manager at risk contract for renovation at two elementary schools.
Arguments raised and holdings:
Petitioner argued that the RFQ included a specific requirement that a Professional Services Advisory Committee of the School Board would evaluate certain performance data on file, and that this requirement was not met because the Committee did not maintain such data. Therefore, the Petitioner argued that the School Board deviated materially from the RFQ specifications. Held: Lack of data was not shown to have any affect on the outcome, and therefore not fatal.
Petitioner also advanced theories for scoring irregularities, such as inconsistency in how long a period of prior work experience was examined for each vendor. Held: Petitioner did not show this to have any impact. “The few instances of arbitrary scoring were actually proved to be too few in number to have any material impact on the average scores.”
Petitioner argued that campaign contributions to various school board members resulted in biased evaluations by these members. Held: Legal campaign contributions were not proven to have any affect on the scoring.
Petitioners argued that a Sunshine Act violation occurred because the meeting of the Public Service Advisory Committee was not properly noticed. Held: It appeared that a Sunshine Act violation did in fact occur, but ALJ found that the Petitioner failed to prove any adverse impact from this violation. In fact, the Petitioner actually benefited by being one of the firms selected to advance to further round of evaluations. ALJ noted that enforcement of the Sunshine Act in circuit court is different than raising this issue in a bid protest. In the former case, action can be set aside merely because the violation occurred. But in an administrative hearing, the party alleging the violation must still show adverse impact.
Eckerd Youth Alternatives, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-0535BID; Judge Susan B. Harrell.
Department of Juvenile Justice issued an RFP for Community Based Intervention Services in Brevard County. The RFP included a requirement for proposer to include a “recidivism rate” for past performance in similar contracts. The RFP did not specify the method of calculating the recidivism rate. The Department’s evaluators applied a long standing scoring method and calculation that used an Average recidivism rate when the proposer had experience in more than one county or judicial circuit.
Arguments raised and holdings:
Petitioner argued that the scoring was not proper because the Department used a calculation methodology that was not disclosed in the RFP. Held: Even though it was not stated in the RFP, the calculation using an “Average” recidivism rate had been the Department’s prior policy and proposer was aware of this, and did not challenge the lack of clear methodology within 72 hours of the RFP being issued. Therefore issue of unclear specification was waived, and it was not arbitrary or capricious to use the long standing prior policy.
Petitioner argued that it was arbitrary to use the Averaging methodology because the Department had in subsequent RFP clarified that it would no longer use the Averaging methodology. Held: Subsequent RFP terms did not apply. Not shown that using prior method, in accordance with long standing policy, was arbitrary or capricious or contrary to RFP Specifications or policy of the Department. It would have been error to apply the new policy without announcing it in the RFP. If proposer wanted clarification, then should have challenged the RFP. Same method was applied to all proposers, and therefore it was not shown to be anti-competitive.
Troy Foundation, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-0536BID; Judge Claude B. Arrington.
Department of Juvenile Justice issued an RFP for a contract to provide Adult Day Treatment Services in a facility setting. Two vendors responded. At issue was the scoring on past performance.
Arguments raised and held:
Petitioner argued that in scoring of the winning proposal, evaluators improperly awarded points to the competing vendor for a program that was not truly a “non residential” program. Held: The RFP included a clear footnote that the specific type of program considered, would be considered in evaluation of past performance. Disappointed proposer failed to raise any challenge to this specification within 72 hours of the RFP being issued, and the issue was therefore waived.
Petitioner argued a Sunshine Act violation in that members of the Department met with the Petitioner after the notice of protest without public notice and without meeting minutes, and further met privately amongst themselves to discuss the protest. Held: No decisions or recommendations were made by the staff members, and therefore this group of staff was not a Board or Commissioner subject to Sunshine Act.
Sun Art Painting Corporation v. Palm Beach County School Board, DOAH Case No. 10-0367; Judge Stuart Lerner.
School Board issued an Invitation to Bid on two painting project jobs. The ITB included a “Revised Bid Summary Sheet” which included spaces to state the bid price and bidder name and address, but did not include a specific signature line on the form. However, in the Instructions in the ITB there was indication that any revised bid summary sheet was to be “executed.” Only 1 bidder signed the form for one job and only 2 bidders signed for the other job. Upon review, the School Board proposed to reject all bids.
Arguments raised and holdings:
Petitioner argued that it was lowest responsive bid, and that failure to include signatures was not a material variance warranting rejection of bids. Held by ALJ: The ITB was not clear as to whether signature was required. “Execution” of the Revised Bid Summary Sheet could mean filling out the form as all the bidders did. Lack of a signature did not provide any material advantage to any bidder, and did not affect the prices that were bid. It would be contrary to competition to re-bid, and would unnecessarily expend and waste taxpayer dollars to re-bid when there was fair competition. Ultimate Holding: School Board overturned the ALJ, and held that lack of signatures was a material variance from the ITB which required the sheets to be executed, and common understanding is that this means the sheets must be signed.
Sunshine Towing @ Broward, Inc. v. Department of Transportation, DOAH Case No. 10-0134BID; Judge John G. Van Laningham.
FDOT issued an RFP for emergency towing services on I-95 in Martin, St. Lucie, and Indian River Counties. Sunshine Towing was lower priced – but Anchor Towing received slightly higher scoring, and proposed award to Anchor was made. The RFP specifically required that the proposer include “occupational licenses” for past three years.
Arguments made and holding:
Petitioner argued that the failure to include the required occupational licenses was a fatal error that rendered the proposal non-responsive, and the proposer was therefore not a responsible or qualified proposer. Held: The ALJ noted the differences between a “minor irregularity” (those deviations from a requirement that provide no advantage in competition or in price) in a bid or proposal that can be waived, and a material variance that cannot be waived. The ALJ also noted that “gatekeeper” type of provisions that address the qualifications of the proposer should rarely if ever be waived – because these type of provisions are intended to winnow the field of possible bidders or proposers. However, under the specific facts, the ALJ found that the requirements was ambiguous because there was no longer an applicable “occupational license” when the proposals were submitted, because the local requirement was replaced with a simple “business tax receipt.” The ALJ concluded that the Agency’s determination that the requirement was “minor irregularity” was not a “clearly erroneous” decision. The decision indicates that the ALJ deferred to the Agency only on the basis of the strict standard of proof (“clearly erroneous”) required in bid protest cases, and that he otherwise agreed that the type of missing information should have been considered material.
TMS Joint Venture v. Commission for the Transportation Disadvantaged, DOAH Case Nos. 10-0030BID, 10-0051BID; Judge Susan B. Harrell.
The Commission issued an RFP for Non Emergency Medicaid Transportation (Medicaid NET) services in multiple counties. TMS challenged the proposed award to MV Contract Transportation, Inc. in Palm Beach and Duval Counties. Issue involved the scoring or proposal of the winning proposer (MV) by taking into consideration the Parent Company’s financial strength and resources. Evaluators testified during hearing that they had not reviewed the content of the RFP except for one Evaluator who had only skimmed the contents.
Arguments and holdings:
Petitioner TMS argued that MV should be disqualified because it did not clearly and properly spell out who was the prime vendor, and Evaluators improperly scored the proposal based on the financial strength, experience and resources of the parent company, rather than the entity that actually submitted the proposal. Held: MV filed a faulty proposal by failing to clearly identify the prime contractor to be scored, and relied upon the experience and solvency of its parent organization; the RFP required that only the “prime vendor’s” experience and solvency should be considered and scored; the Evaluators failed to read the RFP and scored erroneously, not in accordance with the terms of the RFP; and that accordingly the MV proposal should be disqualified.
Respondent MV argued that the TMS Joint Venture suffered the same defect as to not properly identifying a prime vendor but instead relying upon the experience and solvency of the two different legal entities that constituted the joint venture. However, the ALJ found that both the joint venturers would be fully liable under the contract, and they would in fact be the “prime vendor,” and therefore their combined experience could be considered. This was based on Florida law as to liability of parties to a joint venture. By contrast, MV parent company would not be liable for the acts of its subsidiary that submitted the proposal.
Epilogue: After the final hearing, the parties entered into a Settlement and agreed to split the contract awards with MV being awarded Palm Beach County and TMS Joint Venture being awarded the Duval contract.
Dynamic Solution, LLC v. Tampa Bay Estuary Program, DOAH Case. No. 11-2816BID-Judge R. Bruce McKibben
The Tampa Bay Estuary Program issued an RFP for consulting services to develop various numerical and empirical models to assist the District in its work in water quality improvement in Tampa Bay. The RFP described a scoring method, where each of 9 Evaluation Committee members scored the proposals, and then ranked each proposer – and then all met together to develop a final “consensus” ranking. Unclear if the final consensus ranking was supposed to just be a mathematical averaging of each of the evaluators, or was based on further evaluation and discussion.
Arguments raised, and holding:
The Second Ranked Proposer challenged the decision based on argument that the consensus ranking should have been based on the individual score sheets, not based on discussion. Held: Method used was a “logical and reasonable” approach even though the RFP could be interpreted as the challenger suggested. Essentially held that the RFP was not clear, and the approach taken was not arbitrary, illegal, fraudulent or dishonest.
The Challenger also argued that two of the Evaluation Committee members should not have been allowed to participate because they were paid consultants that also did work for the District, and not employees of the District. Held: “It is disingenuous for a respondent to claim, after the fact, that it did not wish to be evaluated by certain members of the committee” when no objection was raised beforehand (essentially a waiver holding).
The Challenger also objected to the winning bidder being given extra consideration in scoring as a “local company” when it was not stated in the RFP as a criteria. Held: It was logical and therefore acceptable to consider any relevant factors in a close call. Note: This seems to be a case where the ALJ simply was deferring entirely to the Agency, even though the RFP did not indicate this was a proper scoring criteria.
K & M Pine Straw v. Department of Corrections: DOAH Case No. 11-1607BID; Judge Diane Cleavinger.
Invitation to Bid was issued for a scrap metal sale and purchase agreement. K & M challenged proposed award of the contract to Cumbaa Enterprises.
Arguments raised and holdings:
K & M argued that Cumbaa’s bid was not responsive because it did not contain both sides of the bidder acknowledgment form ( a two sided form with boilerplate language) Held: The Cumbaa bid did contain the signature page, and the omission of the second page, with boilerplate language as to state bids, was a minor irregularity that could be waived. Failure to include it did not provide any advantage.
K & M argued that Cumbaa’s bid was not responsive because it did not include Proof of Insurance certificates. Held: ITB was not completely clear and consistent, but there was language that the Proof of Insurance was only required at the time of signing the actual contract, not at time of bid submittal. Omission was minor irregularity and not material because no impact on the integrity of the bidding process.
Bedrock Industries v. Osceola County School Board, DOAH Case No. 11-1431BID, Judge Susan Belyeu Kirkland.
Case involved a challenge by Bedrock Industries to award of a bid for supply of readi-mix concrete to Prestige Ready Mix. Initially the School Board issued an ITB, but only Bedrock (the long time contract holder) responded. One Board member objected and suggested that there was favoritism involved toward Bedrock based on its close relationships and business dealing with a former Board member. Further the ITB involved a specification for “front delivery” concrete trucks which Bedrock used, and which limited competition from other vendors. There was no real basis offered for using only front delivery truck. The Board voted to reject all bids, and to do a re-bid. The new ITB allowed for both front and rear loading trucks. Bedrock only bid on the front loading line items, and Prestige only bid on the rear loading line items. Staff recommended award to both Bedrock and Prestige with decision on a case-by-case basis as to which vendor to use – since the job may require either front or rear loading trucks. The School Board met on two occasions, discussed the ITB and bids, and ultimately voted to award the full contract to only Prestige.
Arguments and holdings:
Bedrock argued that one of the School Board members was biased against it (Ms. Hartig) based on her perception of the past relationship with a former Board member, and was not inclined to award to Bedrock. The ALJ did find that Hartig seemed to be disinclined to award to Bedrock, but found that even if her vote was removed, the remaining Board members still would award to Prestige.
Bedrock argued that the decision to reject Staff Recommendation of a split award was arbitrary, as some jobs might require rear loading trucks. Judge found that School Board weighed and evaluated the situation and had the discretion under the ITB to award to one or more in its discretion, and therefore found no error in awarding to Prestige, even over staff’s recommendation for a split award. (Implied is the notion that Bedrock failed to carry its burden of proof to show that this was an arbitrary action not supported by any facts or logic.)
Bluechip Energy LLC v. University of Central Florida, DOAH Case No. 11-0538BID; Judge Susan B. Harrell.
ITB at issue involved solicitation under the American Recovery and Reinvestment Act for a solar power technology systems at Florida schools and universities. Bluechip was rejected as not responsive by the University. Bluechip sent several letters demanding an explanation for rejection and non-consideration of its bid. University of Central Florida (UCF) interpreted the letters as a bid protest, and sent to DOAH for a hearing – but reserved the right to challenge the sufficiency of the letters as a Notice of Protest or Formal Protest. No Bond was submitted with the protest letters.
Arguments raised and holdings:
Bluechip was not represented by legal counsel, but by a “Qualified Representative.” Bluechip argued that its bid met all ITB specification, but the ALJ rejected the argument finding:
1. The protest letters were not proper filings in compliance with bid protest requirements of UCF and failed to include required protest bond.
2. Even if the filings were proper the bid by Bluechip failed to meet ITB specifications for:
a. Did not meet Buy America provisions in the ITB, based on including a German inverter component, and was not exempt from meeting Buy America provisions.
b. The solar (photovoltaic or “PV”) system was not functional and did not meet minimum usable capacity requirements of the ITB.
c. The system was not functional, and would not be able to meet requirements to supply electricity in an emergency (System could not turn on its “inverter box”).
d. The deficiencies were not a minor irregularity that could be later cured after the bid award, and before a contract.
e. Did not meet requirement to include a certified solar contractor as part of its bid. Reference to a person who worked for a wholly owned subsidiary, that was not listed as a subcontractor entity in the bid, was not sufficient to meet the ITB requirement.
f. Did not have certification, or proper application for certification from Florida Solar Energy Center as required by ITB.
3. Overall decision to reject a non-conforming bid was not arbitrary, illegal, fraudulent or dishonest.
Infinity Software Development, Inc. v. Department of Education, DOAH Case No. 11-1662BID; Judge Susan B. Harrell.
This protest involved an Invitation to Negotiate issued by the Department of Education for a computer software program, including web based applications for students, teachers, and parents. Infinity and Microsoft were determined to be the two top scoring proposals, and DOE entered negotiations with each. A key consideration in the case was a specification in the ITN that required that ownership of all content, application code and documentation must be turned over to DOE, so that it would have ownership and continue to use the materials after the contract period. For materials that were not developed specifically for the project the ITN provided that DOE must be given a perpetual, royalty-free, nonexclusive license to use the materials. No protest of the specifications was made, and this requirement was reiterated in response to Questions and Answers which became part of the ITN as addenda.
Arguments raised and holdings:
The argument was raised by Infinity that Microsoft was not responsive to the ITN requirements because Microsoft affirmatively stated in its proposal that it would not meet the requirement to provide ownership of all materials developed to DOE. The ALJ agreed, and specifically rejected the argument by DOE and Microsoft that because an ITN was used, that the details on providing for DOE’s ability to use the software materials could be, and in fact were, worked out in the negotiations with Microsoft. DOE agreed to alternative (“co-ownership and licensing”) arrangements during the negotiations and notified Infinity that such arrangements were acceptable. But the ALJ found that this violated the clear provisions of the ITN specification, and found that instead of finding Microsoft non-responsive, DOE essentially changed the requirements of the ITN which is contrary to competition.
A second issue raised was that Microsoft included a letter stating that its proposal was “subject to change at any time,” should not be interpreted as a binding offer or commitment,” and “constitutes trade secrets that cannot be disclosed,” and that Microsoft “makes no warranties expressed or implied in this document.” The ALJ found that this amounted to a conditional offer that was contrary to the ITN specifications that required a certification of commitment to the proposal being made.
A third issue was that Microsoft also failed to use the required “Price Form” and offered language that deviated from the ITN requirement on price being all inclusive. The Judge found that, taking the evidence as a whole, Microsoft did not intend to be bound by its reply and thought that anything that was contrary to the ITN could be worked out in negotiations. The ALJ rejected this notion, and found that a vendor submitting a Reply to an ITN, like any other form of competitive solicitation, must be found responsive to the ITN in order to be awarded the contract.
The Judge concluded that “an agency action will be found to be ’clearly erroneous’ ” if the agency’s interpretation conflicts with the plain and ordinary intent of the law, and that “judicial deference need not be given to the agency’s interpretation” in such instances.
The Final Order upheld the Judge’s determinations and awarded to Infinity as the remaining responsive vendor selected for negotiations.
If you have any questions regarding bid protests, please feel free to contact one of the attorneys at Smith & Associates.
